Credit expert ‘mortified’ by Trump administration’s 50-year mortgage plan for American homebuyers

When the Trump administration floated the idea of ​​a 50-year mortgage, credit solutions expert Micah Smith didn’t mince words.

“I was scared,” she told Fox News Digital.

On paper, extending a home loan over half a century promises lower monthly payments. In fact, Smith warns, it could trap millions of Americans — especially retirees and first-time buyers — in what she calls a “risky” deal that represents “one shift in the market away from completely and utterly sinking.”

“I’m afraid the 50-year mortgage is going to attract the unsavvy consumer, the person who doesn’t understand how finances work and how interest works,” Smith said. “If you’re locked into a 50-year mortgage, it will take four times as long to build up equity in the home.”

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“This will appeal to a consumer who is already struggling,” she added. “There will be greater disparity, again, between the rich and the poor. And I think the disparity will become greater with this 50-year mortgage.”

In early November, president Donald Trump and officials in his administration signaled plans to develop a 50-year mortgage that they believe could expand access to homeownership. Trump posted on Truth Social with a chart showing “great American presidents,” including Franklin D. Roosevelt, whose New Housing Reforms helped pave the way for the modern 30-year mortgage, himself appears, suggesting he would develop a 50-year version.

“Thanks to President Trump, we are already working on the 50-year mortgage — a complete game-changer,” Federal Housing finance Agency Director Bill Bolte added in a post on X.

Under current rules, mortgages longer than 30 years are generally not considered “qualified mortgages” under the CFPB’s ability-to-repay rule, and the FHA and SCGs currently only allow 40-year terms for loan modifications.

An analysis by UBS found that a fifty-year mortgage results in total interest payments equivalent to approximately 225% of the home price – more than double the level under a thirty-year loan. UBS also noted that with a 50-year term, borrowers would have paid back only about 11% of the loan principal after 20 years, highlighting how slowly equity is built over this extended period.

“The people who will be helped will be people who have a plan…a substantial plan to increase income in the future,” Smith said, noting that those most affected may be first-time homebuyers, retirees and even military families.

“My concern would definitely be for the older generations, people who are already struggling, and maybe living on Social Security… If they don’t have the ability to even fix up the house that they own that they don’t own, that’s very concerning,” she added. “I also think for people who might be in the military, I think that would also be a very scary situation because they don’t have the ability to build any justice at all.”

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“We’re actually talking about first-time homebuyers in the younger generation, Generation Z, who are coming in with a lower credit score. So if they’re jumping on these mortgages for 50 years, and they’re not even coming in at the premium tiers, that’s a really scary thing,” Smith continued.

The White House did not immediately respond to Fox News Digital’s request for comment.

Asked how a 50-year mortgage could change the way clients budget, emergency funds, or home maintenance, Smith emphasized saving as much as possible before purchasing.

“If you’re budgeting now, you’re going to have to get better at budgeting,” Smith said. “You need to set aside money for a rainy day…if you can save a little bit of it, because again, that compound interest is critical to wealth over a long period of time. So far, we haven’t had any consumers ask us about the 50-year mortgage.”

“If you’re sitting here, and you’re one market correction away from being underwater, that’s the biggest thing that really scares me.”

– Micah Smith

“However, I teach brokers, investors and brokers all over the country, and now they are… [are] “It’s actually scarier than that,” she claimed. “I haven’t heard a single positive note from a single real estate agent yet… I guess [there is] More positive response from some mortgage lenders, but we have to understand that the narrative will be different depending on the motivation.”

Smith agreed that a 50-year mortgage seemed like a lifetime commitment, and warned against a culture of instant gratification and loss of thought about the long term.

“We live in a microwave society, and a lot of people fail to think long-term, and I think that’s what gets a lot of us into trouble… A mortgage is supposed to be something where it’s like: You get it, you buy it, you pay it off, and you own something.”

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“You have to look at the long-term picture if you want to be successful,” she said. “[The 50-year mortgage] “It’s really a recipe for disaster in the long term.”

When asked for one word to describe the idea as a whole, Smith didn’t hesitate: “Risy.”

“You have to do the math. You have to do the numbers. And again, you’re one market shift away from being completely and completely underwater. So I think the best word for it is absolute risk.”

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FOX Business’ Eric Revell contributed to this report.